October 9, 2020
Business Travel and Global Mobility – What Does the Future Hold?
A rapidly changing landscape makes predicting the future of global business travel and assignments harder, but there is some good news.
Entering the fourth quarter of 2020, in-country and cross-border travel is resuming in some locations, while rising cases of coronavirus are forcing a retreat to tighter restrictions again in others. With budget season upon us, business leaders are looking at the strategic movement of their people, how it can best support their current and future needs and trying to plan for what’s next.
If there is one thing that the events of 2020 have shown us, it’s that what happens today can change tomorrow, and planning in this atmosphere of uncertainty is difficult, to say the least. HR professionals are assessing various scenarios with humility and humanity while anticipating and preparing for the future. First, knowing where your employees are, and second, understanding the full consequences of travel – whether personal, medical, legal, or tax-related – are important steps in determining the overall costs and benefits of face-to-face interactions. As companies consider asking associates to accept travel as part of their work responsibilities and career growth, adequate understanding by all of the potential impediments can improve planning, while being ready to quickly course correct can mitigate problems.
What Does the Current Landscape Look Like?
There’s no question that the travel industry has been hit hard. Analysts predict that corporate travel, a $1.5 billion industry that constitutes anywhere from 40% to the majority of revenue for organizations in the hospitality and travel sectors, may not recover to its former levels for several years.
Even so, the news isn’t all bleak. A recent pulse study by the Global Business Travel Association gauged how travel managers were feeling about recovery levels within the next three years. Assuming an effective vaccine and public health measures are in place, 42% believe that their number of business trips will return to their pre-pandemic levels, and 6% indicated they expect them to increase.
Once business travel returns to the “new normal,” it’s reasonable to expect that mobility programs that involve extended business traveler, short-term and long-term assignments will follow suit, but clearly much will depend on the speed and progress of global virus mitigation and control efforts.
Further adding to the uncertainty is the recognition that a lot of work is now accomplished remotely, and companies are assessing the savings realized with the decline in travel as they engage in future decision making. Right now, all signs point to a more targeted use of business travel, rather than a resurgence of employees previously known as “Road Warriors.”
At the same time, many business leaders have to be weighing the competitive benefits of getting out in front of initiating business travel again, and whether that translates into a “first-move advantage,” projecting confidence and giving customers a clear message that they are open for business.
Frequent corporate travelers from multiple industries shared with Condé Nast Traveler that they fully expect some level of activity to resume, particularly where time zone challenges or sensitive merger and acquisition negotiations make virtual solutions impractical or insufficient. In an interview with The New York Times, Evan Konwiser, executive vice president of product and strategy for American Express Global Business Travel predicts that “People will still need to network, learn, and build relationships. None of this will change. There will probably be less density and more hand sanitizer.”
At the outset of the pandemic in Q1 and Q2, many industry experts were fairly optimistic that business travel would rebound well before the end of 2020. While several global airlines have increased the number of daily flights and more hotels are opening previously closed locations, we have not seen the expected bounce back, and may not for some time.
In the meantime, ongoing efforts to ensure superior cleanliness and social distancing standards are upheld will continue to help draw back customers.
An increasing number of companies are building in ways to take the pulse on employee willingness to travel, fully recognizing the critical importance of duty of care responsibilities when asking people to get back out on the road or in the air.
With extended quarantine periods still in place in many locations, and given the amount of time it takes to navigate personal, immigration, and tax issues, we could see a rise in extended business traveler (EBT) approaches to mobility, with employees either unaccompanied for the duration of the assignment, or unaccompanied for an initial period and later joined by family members.
This approach has traditionally been employed for such business goals as fostering knowledge transfer and collaborative management, engaging in extensive business negotiations, or supporting the installation of complex systems or equipment that require on-site personnel. EBT policies can add flexibility to an organization’s program while offering a less costly alternative to long-term assignments or permanent transfers.
It’s important to note, however, that EBT compliance is crucial for both companies and employees. It’s essential to be fully up to speed on the tax implications of travel between U.S. states, as well as the more obvious concern about incurring both home and host tax obligations when the employee is working overseas. Tracking these employees – and the type of work that they are doing in each location – is important for many reasons, not just in emergency situations, but also with respect to unintended permanent establishment consequences. It may be more prudent to plan for and ask the employee to remain in the destination location for a longer period of time at the outset, reducing the number of return trips and corresponding risk of virus-related disruption and restrictions, especially for global travelers.
While we may be crystal-ball gazing to try to assess the extent to which global business travel and assignments will fully resume, and when, one thing is certain: we can expect more scrutiny of travel documents and proof of possession of the correct visa for the type of work to be performed, current and valid health screening certificates and evidence of satisfying quarantine requirements.
The question of whether Covid-19’s acceleration of remote work and greater comfort levels with digital collaborative tools will mean that “virtual assignments” replace in-person, host-based assignments is still largely unanswered. In a detailed checklist of items to consider, Mercer notes the value that virtual assignments could potentially offer as “one more tool in the growing arsenal of options that companies need in order to deploy their global operations.”
Tips for Navigating Global Business Travel in 2020
In this rapidly changing environment, it’s difficult to prepare for and navigate corporate global business plans and strategies. But there are some tips that can help, including:
- Visiting the U.S. State Department website to find the most current information on travel restrictions/requirements throughout the world.
- Checking airline websites for up-to-date information on travel restrictions, indicating where a quarantine upon arrival is in effect, the documentation needed prior to travel, Covid-19 testing and/or health screening requirements before or upon arrival.
- Discussing upcoming assignments and relocations, whether in the U.S. or between countries, with internal or external tax advisors to understand any impact on corporate tax and/or the employee’s personal tax obligation(s).
- Seeking advice from immigration attorneys regarding the impact of an assignment based on anticipated length (Extended Business Trip, Short or Long-Term Assignment) as well as any impact if the employee works remotely.
- Reviewing the compensation and allowance package, such as the per diem calculation, as it may need to be increased based on newer risk factors and consider offering financial incentives to increase acceptance of extended business travel, especially if return trips must be curtailed due to virus concerns.
- Ensuring duty of care is maintained by building a tracking system for travelers, as well as those on expatriate assignments, and by re-visiting health insurance coverage for employees temporarily away from home, particularly in high-risk locations.
The Bottom Line
As we continue to adjust to the new normal, predictions about the volume of business travel and other programs that support a globally mobile workforce are difficult to make.
However, business must go on, and employees will continue to cross state lines or country borders on some level. Global mobility professionals can prepare to meet the challenges by taking a proactive role in staying informed, planning early and communicating often with business leaders, line managers, and employees, and by offering flexibility with a variety of policies to answer different business needs.
Understanding and appreciating the cause of any hesitancy to travel or relocate, and addressing these concerns as they surface, demonstrates duty of care for your employees while strengthening your work community and corporate culture. As hybrid models of work that entail a blend of remote and in-person interaction are likely here to stay for at least the next six months to a year, we may never revert to the “old way” of doing things. But you don’t need to be a futurist to know that whether it’s through extended business trips, short- or long-term assignments, or permanent one-way transfers, the mobility team can continue to help build strong organizations by bringing people from different cultures together to champion the same goals and achieve business success.
Are you re-visiting your business travel or talent mobility policy right now? See how our team can help.
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Leah Johnson is Sterling Lexicon’s Director, Client Solutions, and has worked in the global mobility industry for more than 20 years. She has held management positions in business development, operations, account management, and consulting, and had the opportunity to live and work in Tokyo and Hong Kong for six years. She initiated destination services in Hong Kong for a relocation management company and directed global mobility for Goldman Sachs in the APAC region. She graduated from Colgate University, earned an MBA from the University of Alabama in Huntsville, and maintains a Senior Certified Professional (SCP) certification from SHRM.